US cancels $700 million in battery funding, putting pressure on EVs

The US Department of Energy (DOE) has canceled more than $700 million in funding for battery and electric vehicle-related technology projects, citing missed milestones, lack of economic viability or a lack of positive returns for taxpayers. The decision has raised concerns that the US could fall behind China in the race for battery technology and manufacturing, and has affected plans to deploy factories in states such as Kentucky and Missouri.

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DOE Funding Cancellation: Overview and Highlights

The canceled grants were part of the infrastructure and supply chain package that supports battery manufacturing, according to DOE spokesman Ben Dietderich. Of that, $316 million was earmarked for Ascend Elements to make components from recycled EV batteries at its roughly $1 billion plant in Kentucky; $57.7 million for American Battery Technology (ABTC) to build a lithium hydroxide facility in Nevada; and $117 million for Anovion to develop synthetic graphite for lithium-ion battery anodes.

Democrats strongly opposed the DOE's move, saying it overstepped its authority and undermined efforts to expand domestic battery manufacturing capacity.

Cancelled projects and numbers

Business/Project	Amount	Project objectives	Location
Ascend Elements	316 million USD	Manufacturing components from recycled EV batteries	Kentucky
American Battery Technology (ABTC)	57.7 million USD	Construction of lithium hydroxide plant	Nevada
Anovion	117 million USD	Production of synthetic graphite for anodes	Not specified

The total scale of cancellation exceeds 700 million USD, including many projects in the battery supply chain from materials, recycling to component manufacturing.

Reasons for cancellation and political backlash

The DOE cited three main groups of reasons: the project failed to meet its milestones; was not economically viable; or did not provide a positive return to taxpayers. On the legislative side, some Democrats argued that canceling the funding undermined the domestic battery industry’s drive to create jobs, reduce import dependence, and support the goal of transitioning to electric vehicles.

Meanwhile, the companies mentioned are still reevaluating their plans. According to the information mentioned, Ascend Elements said it is continuing its project in Kentucky, despite the withdrawal of funding.

Impact on battery supply chain and US EV targets

According to Politico’s E&E, the funding cancellation could impact plans for large-scale plants in several states, including Missouri and Kentucky. At the supply chain level, links such as key materials (lithium hydroxide, synthetic graphite) and battery recycling are all strategic steps to reduce costs, stabilize supply, and reduce foreign dependence.

As public resources are withdrawn, companies may have to seek alternative private capital or reconsider the scale or pace of deployment, which could slow progress toward achieving goals on digitalizing green transportation, localizing battery production, and meeting the country-of-origin criteria of U.S. incentive packages.

Kentucky, Missouri and the risk of delays

Kentucky is seen as a key destination for Ascend Elements’ large-scale battery recycling project. Without public funding, raising market capital could drag on, impacting the operational milestone. Missouri could also be impacted as plant plans are restructured to accommodate new financing conditions.

The gap with China may widen

Many assessments say that China is leading the production of lithium-ion batteries and is accelerating research into new technologies such as solid-state batteries. In the context of fierce competition, the US's narrowing of public support for some key projects could widen the production and technology gap if businesses do not promptly arrange alternative resources.

However, the actual impact depends on the ability to leverage private capital, optimize costs, and coordinate policies at the federal and state levels to maintain momentum in building a domestic battery supply chain.

Next scenario: alternative capital and efficiency problem

In the short term, affected businesses may prioritize projects that are ready to operate early, or adjust schedules to fit their financial capacity. In the long term, “taxpayer efficiency” criteria and clear progress milestones may become key conditions in public support negotiations, directing cash flow to projects with a higher commercial potential.

For the US EV target, the big question is whether the pace of domestic capacity expansion – from materials to components to recycling – can keep up with market demand and the country-of-origin constraints required to qualify for incentives. A disruption in support at a critical stage could prolong the time it takes for supply chains to reach self-sufficiency, while also increasing price competition with products from mature ecosystems.

In sum, the DOE’s decision to cancel more than $700 million in battery funding immediately challenges several key projects and the goal of expanding the domestic battery supply chain. How companies raise alternative funding and the degree of policy coordination will determine whether the gap with competitors, especially China, widens in the coming years.

Source: https://baonghean.vn/my-huy-700-trieu-usd-tai-tro-pin-ap-luc-len-ev-10308980.html